Changing roles of IR professionals

Summary: With investor relations jobs becoming more complicated than ever, companies turn to the Internet to relieve some of the workload.

If Scientific-Atlanta's Gina McGill is in the office, you can bet the Internet is up and running. That's because McGill is part of a new breed of investor-relations professionals who rely on the Web to quickly meet investors' needs.

"Our Web site definitely relieves us of a lot of the shareholder phone calls we would get otherwise," says McGill, who works at the Atlanta offices of Scientific-Atlanta, a company that helps cable and satellite operators add Web access to television sets.

Thanks to Scientific-Atlanta's Web site, investors no longer have to call McGill to get company news, buy company stock or change their dividend-check mailing address. And that's only a small part of how the Web is changing McGill's job description and that of other IR

"IR professionals are under increasing pressure to respond and under pressure to respond better and cheaper because of the Internet. That may seem like a negative, but the Internet is actually an incredible tool." -- Lynn Little, senior vice president, CCBN.com

While IROs of the early 1990s had to prepare quarterly reports, write news releases and answer shareholders' questions over the phone, now investor relations officers (IROs) also must provide real-time responses to Internet buzz, upload shareholder communications pieces, broadcast conference calls on the Internet -- and much more.

So the Internet turns out to be a mixed blessing. It helps IROs handle responsibilities that have mushroomed with new Securities and Exchange Commission rules greatly expanding disclosure of financial information. But it also creates new challenges for IROs and the companies they work for. For example, not all IROs have the technological know-how to run corporate Web sites and -- if shareholder communication pieces aren't easily found at the site -- then e-mailed requests can pile up.

A recent survey of the National Investor Relations Institute's 2,300 corporate members found that 96 percent are incorporating Web services into their company's IR rapport, opening a new level of investor services.

"They can put everything on there that investors would want," says Lynn Little, senior vice president for CCBN.com, a Boston provider of Web-based tools and information services for IR professionals. According to CCBN Web traffic surveys, the top five things investors want are news releases, an investor overview, stock quotes, stock charts and financial reports.

"We have 500 institutional clients that we work with, and they clearly are using the Internet as a virtual filing cabinet," Little says. "That's fundamentally what the IR Web site is all about -- packaging information in a very usable format for people and having it all in one place."

Investors also want features such as conference call replays, PowerPoint slide shows, real-time stock quotes and the ability to request information online, Little says. Other biggies are services such as "e-mail alert," in which investors get an e-mail every time information they are interested in is updated on the company's site.

"The idea is to use the Web not so you can jazz things up but to use it to cost-effectively reach your investors, customers and do public relations cheaply and instantly," says U.N. Umesh, a business professor at Washington State University's campus in Vancouver. "That translates to less costs and more sales for any business."

Because of the new technology, IR professionals are getting fewer questions on company background, SEC filings and the like. But they're suddenly fielding loads of unsolicited e-mails, being graded on how fast information is posted online and adding "Web site content creator" to an already overloaded job description.

"I'm a staff of one," says Liz Aune, interim IR manager for e-tail marketer Vicinity in Sunnyvale, Calif. "I'll take any help I can get."

Ernest Scott, shareholder relations manager at KeyCorp in Cleveland, says companies can lessen the amount of work a Web site creates by researching what clients want. (The KeyCorp site was recently highlighted as one of five "Best of Breed" by the National Investor Relations Institute in Vienna, Va.)

"Go to the relationship management group," Scott says, "and have them make a call to the client as to what their folks want to see. Get their information. Get their input."

The next step, says Scott, is to spend half a day brainstorming questions that could come up as a result of online postings. "Then train someone on the answers that come from those questions," Scott says. "Focus in on what type of questions will be coming in, then build the site around it."

For instance, he says, develop a Q&A sheet the call center can use so questions aren't routed to IR, and put the Q&A on the Web site. Also, put a prominent audiovisual clip on the site's front page that explains how to find answers and how to navigate the site. Finally, post the most-requested items on the site and make sure the site has directions at every turn (for example, "Click here to see the latest company report").

"Managing and feeding the site is definitely the biggest challenge," says Tom Beermann, group manager for business/press relations for Intel in Santa Clara, Calif. Intel runs a separate Web site under its ticker symbol just for investors.

Beermann says other challenges can be ironed out if job duties are set before the site is launched. For instance, who's going to reply to unsolicited e-mails? Who's going to track down any online buzz about the company? Who's going to update the site every time there's a press release or company report? Who's going to poll potential investors to make sure the online information is what they need?

Successful IROs, says Umesh, use as many tools as they can to send investors to automated functions on the site. For instance, they replace on-hold elevator music with a message telling callers to check out the Web site.

"Two-thirds of the time, investors can find the information on the site," says Umesh. "Tell the caller to go to a frequently-asked-questions page. FAQs are a wonderful way to let customers know about new happenings. It's far cheaper to update the site than to keep answering the telephone."

Companies unable to train or hire employees savvy in both investor relations and technology can turn to a growing number of IR subcontractors such as CCBN.com.

By having a subcontractor do the behind-the-scenes programming, IROs can send e-mails or faxes to distribution lists of investors, reporters and others with just a few key strokes. Companies can link with financial services such as CBS MarketWatch.com and have real-time stock charts and trend graphs posted to the company site. They can even work with online brokerages such as BUYandHOLD.com to sell company stock from the Web site.

Laura Lefebvre, IR manager at office-supply retailer Staples, subcontracted the Webcasting portion of her Boston-based company's site after a stressful crash course more than a year ago when the company decided to broadcast its quarterly conference calls on the site. Having someone else do the recording and programming "has been a tremendous help," she says.

Little, of CCBN.com, says: "IR professionals are under increasing pressure to respond and under pressure to respond better and cheaper because of the Internet. That may seem like a negative, but the Internet is actually an incredible tool. IT (information technology) can really take an administrative burden off the IR professionals."

Smart Business: Changing Roles of IR Professionals